Is it worth the cost to make a 2/1 into a 2/2?

Medium-Term Rentals
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Is it worth the cost to make a 2/1 into a 2/2?

Tom Conant
Fresno · Member since 2019 · 28 posts · 18 votes

My wife and I just moved into a house on a 1/2 acre lot in Fresno with large detached 3 car garage with a kitchen and bathroom on the back of the property.  My goal is to convert it to an 1100 sqft second house (which it looks like anyway until you realize 70% of the square footage is garage space).

It will have it's own private driveway, car port, and a fenced yard to separate it from our part of the property.

Our goal is to create a mid term rental for traveling nurses.  At minimum, the kitchen and bathroom will be updated, and the garage will be converted into 2 bedrooms and a living room.

I've considered adding an addition bathroom into this space as well.  My question is if this will be worth the money as I will need to dig into the concrete slab foundation and tie into the existing sewage line.  It's possible that I may even need to increase the size of the entire sewage line depending on the size it is currently.

A second bathroom would make the space ideal for a pair of traveling nurses, but it is also a significant cost added to the project.

For those specializing in this space, I would love to hear feedback on how valuable the second bathroom will be.

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Alecia LovelessPro Member
Member since 2019 · 3k+ posts · 2k+ votes
2y

@Tom Conant James has given you a rough estimate of how much more you might get adding the bathroom.

Now I’d get some estimates for the scope of work for the foundation and then calculate how long it will take you to recover your investment if you do the work.

Then you can figure out if it’s worth it to you to do the project or if it would be wiser to spend your money on something else with a quicker rate of return.

You also might want to talk with a couple of respected realtors to see what type of extra value you could get when you go to sell your house for each option.

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  • Jeff Zimmerman
    Real Estate Agent · Fresno, CA · Member since 2014 · 368 posts · 174 votes
    2y

    Hey Tom, that's a great question.  I don't do short or medium term rentals myself so I can't speak into that directly, but I've worked with a number of clients that do.  I can say that from the description of your home, adding that second bath probably won't add a lot of appreciation value to the home so additional cash flow would be where the value would be. 

    I wonder if you incurred the additional cost to put in a second bath, would it be too much more expensive to simply create two separate units and add a kitchenette into the second space?  then you'd have two units instead of one where nurses wouldn't have to share.  In my mind it seems like the best options may be to simply keep it as it is with only 1 bath OR create two separate units with a small kitchenette.  But again, I'm not really in that space so someone who has more experience may have a better opinion. Good luck! 

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  • James Carlson
    Real Estate Agent · Colorado | stan.store/JamesCarlson · Member since 2014 · 2k+ posts · 2k+ votes
    2y

    @Tom Conant

    I don't know your market, so take with a grain of salt. Here in Denver and Colorado Springs where our medium-term rentals are, an extra bathroom on a 2/1 would likely get you an extra $300, maybe $400, in the midterm rental market. I'd use those numbers here in Colorado if I were trying to gauge whether it's worth it. 

    Good luck!

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  • Bonnie LowPro Member
    Lender · Asheville, NC · Member since 2016 · 1k+ posts · 1k+ votes
    2y

    For what it's worth, in my experience 1/1s and 2/1s are the most popular configuration for travel nurses. A lot of people assume the "travel nurse" niche caters to groups of nurses who travel together and share a home and therefore target a rent-by-room strategy. However, more often than not, this is not the case. They usually either travel alone or with a significant other (and a pet!) so often the second bedroom comes in handy for the significant other if they work from home. If you are going to pursue a rent-by-room strategy, then having a dedicated bathroom for each person is a definite advantage. Just know that people who rent a room in a shared home usually want to pay on the lower end of the scale. 

    [email protected]
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  • Alecia LovelessPro Member
    Member since 2019 · 3k+ posts · 2k+ votes
    2y

    @Tom Conant James has given you a rough estimate of how much more you might get adding the bathroom.

    Now I’d get some estimates for the scope of work for the foundation and then calculate how long it will take you to recover your investment if you do the work.

    Then you can figure out if it’s worth it to you to do the project or if it would be wiser to spend your money on something else with a quicker rate of return.

    You also might want to talk with a couple of respected realtors to see what type of extra value you could get when you go to sell your house for each option.

    1Reply
  • Tom Conant
    OP
    Fresno · Member since 2019 · 28 posts · 18 votes
    2y

    Hey guys - I apologize for the late reply.  Based on your replies as well as further consideration, I think I'm going to leave the single bathroom for now.  I have selected a floor plan that will allow me to add a second bathroom in the future if I choose to do so.

    @Jeff Zimmerman

    The property is in old fig garden off of Maroa and Gettysburg.  Though I may choose to keep the property forever, I am positioning so that I may sell it in 5-6 years.  The main house is 2000sqft and the back unit will be approximately 1100sqft once converted.  I would love to hear your thoughts on the value of a second unit in this particular area.  I've had trouble finding good information on how this would affect an appraisal.

    @James Carlson

    Your numbers match my best guess for Fresno as well.  I believe I am going to start it as a 2/1 and then reevaluate in a year.  I am choosing a floor plan that will allow me that flexibility as the bathroom will be carved into the living room space if I go that route.

    Thanks for the feedback.

    @Bonnie Low

    I will have a desk/work station set up in the corner of the living room.  My plan now is to have two equal sized bedrooms.

    An alternative I have considered is to have a larger room that could perhaps fit a king bed, and then a smaller bedroom with a twin and a desk/work station built around it.  Maybe something like this?

    Or do you think I would be better off with two bedrooms with queen beds?  Love to hear your thoughts.

    1Reply
  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    2y

    @Tom Conant  Two bedrooms that fit queen beds.  You can always make one a Murphy if they want office space.  Yeah some people have to have a king but most are okay with a queen.

    0Reply
  • Conner Olsen
    Real Estate Agent · Austin, TX · Member since 2020 · 1k+ posts · 941 votes
    2y
    Quote from @Tom Conant:

    In my experience, the second bathroom is going to add more ARV value and not much more rental revenue. Look at it from a resale perspective.

    0Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    2y
    Quote from @Tom Conant:

    My wife and I just moved into a house on a 1/2 acre lot in Fresno with large detached 3 car garage with a kitchen and bathroom on the back of the property.  My goal is to convert it to an 1100 sqft second house (which it looks like anyway until you realize 70% of the square footage is garage space).

    It will have it's own private driveway, car port, and a fenced yard to separate it from our part of the property.

    Our goal is to create a mid term rental for traveling nurses.  At minimum, the kitchen and bathroom will be updated, and the garage will be converted into 2 bedrooms and a living room.

    I've considered adding an addition bathroom into this space as well.  My question is if this will be worth the money as I will need to dig into the concrete slab foundation and tie into the existing sewage line.  It's possible that I may even need to increase the size of the entire sewage line depending on the size it is currently.

    A second bathroom would make the space ideal for a pair of traveling nurses, but it is also a significant cost added to the project.

    For those specializing in this space, I would love to hear feedback on how valuable the second bathroom will be.


    dont convert 2/1 to 2/2 but convert 2/1 to 3/2 if possible. It's the number of bedroom that makes sense.
    0Reply
  • Tom Conant
    OP
    Fresno · Member since 2019 · 28 posts · 18 votes
    2y
    Quote from @Carlos Ptriawan:

    dont convert 2/1 to 2/2 but convert 2/1 to 3/2 if possible. It's the number of bedroom that makes sense.
    I do have the space to do it, and did consider it, but have been against it for two reasons: first, I only have parking for two vehicles based on how I plan to separate the property.  Street parking is not an option.

    Second, I am comfortable with traveling nurses as I feel there is a certain amount of safety with that profession, but I work as a firefighter and am gone for 2-4 days at a time and am cautious about who will be on the property with my wife and children. While I am away.
    1Reply
  • Tom Conant
    OP
    Fresno · Member since 2019 · 28 posts · 18 votes
    2y
    Quote from @Conner Olsen:
    Quote from @Tom Conant:

    In my experience, the second bathroom is going to add more ARV value and not much more rental revenue. Look at it from a resale perspective.

    Even for a second unit?  It won’t technically be an ADU as I can permit a full second dwelling, but it will be similar to a large guest house.
    1Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    2y
    Quote from @Tom Conant:
    Quote from @Carlos Ptriawan:

    dont convert 2/1 to 2/2 but convert 2/1 to 3/2 if possible. It's the number of bedroom that makes sense.
    I do have the space to do it, and did consider it, but have been against it for two reasons: first, I only have parking for two vehicles based on how I plan to separate the property.  Street parking is not an option.

    Second, I am comfortable with traveling nurses as I feel there is a certain amount of safety with that profession, but I work as a firefighter and am gone for 2-4 days at a time and am cautious about who will be on the property with my wife and children. While I am away.

     I built  bathroom and it's not that expensive actually depending on water and sewer line. But in case my tenant is living in different floor and I do have backyard for 20 cars. For safety you could rent out to female RN so it's (hopefully) safer to spouse/family. It's not easy but possible.

    0Reply
  • Zachary DealPro Member
    Lender · Member since 2023 · 465 posts · 425 votes
    2y

    I think one thing to keep in mind when adding bedrooms/bathrooms is to ensure you're not creating functional obsolescence. It doesn't sound like this would be the case but making sure there is still a normal" sized living room/common area, etc. and the bedroom/bathroom is in line with properties with similar square footage in the area. If there are too many for the house size it can be difficult to secure financing or potentially sell the property one day

    [email protected]
    0Reply
  • Nicole Heasley Beitenman
    Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
    2y
    Quote from @Bonnie Low:

    For what it's worth, in my experience 1/1s and 2/1s are the most popular configuration for travel nurses. A lot of people assume the "travel nurse" niche caters to groups of nurses who travel together and share a home and therefore target a rent-by-room strategy. However, more often than not, this is not the case. They usually either travel alone or with a significant other (and a pet!) so often the second bedroom comes in handy for the significant other if they work from home. If you are going to pursue a rent-by-room strategy, then having a dedicated bathroom for each person is a definite advantage. Just know that people who rent a room in a shared home usually want to pay on the lower end of the scale. 

    This has been my experience in my market as well. I've yet to encounter a prospective MTR tenant travelling as part of a group. Everyone so far has been travelling solo or with a significant other.
    0Reply
  • Nicole Heasley Beitenman
    Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
    2y
    Quote from @Tom Conant:
    Quote from @Carlos Ptriawan:

    dont convert 2/1 to 2/2 but convert 2/1 to 3/2 if possible. It's the number of bedroom that makes sense.
    I do have the space to do it, and did consider it, but have been against it for two reasons: first, I only have parking for two vehicles based on how I plan to separate the property.  Street parking is not an option.

    Second, I am comfortable with traveling nurses as I feel there is a certain amount of safety with that profession, but I work as a firefighter and am gone for 2-4 days at a time and am cautious about who will be on the property with my wife and children. While I am away.

    In my market, there's very little demand from MTR tenants for 3 bedrooms. The exception is insurance displacements. As you've specified you want to target travel nurses, you'll likely get more bang for your buck from a 1 or 2 bedroom.

    0Reply
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